My Euro-Yuan Meme in the WSJ

One month ago, in “Superpower Smackdown – Germany vs. China” I wrote:

“Germany and China are economic superpowers because they have exchange-rate dominance. The Germans keep their European Union satellites enslaved via the euro. The Chinese have been transferring the USA’s industrial power to themselves via their yuan-dollar currency peg.”

And yesterday, this was in the headlines of the Wall Street Journal:

“The euro has punished Southern Europe the way China’s currency has hurt the United States.”

Here’s a picture (click to enlarge):

Nice, huh? What will be in the WSJ headlines a month from now? I don’t know; I haven’t decided yet (ha, ha).

Austan Goolsbee discussed Germany and Europe in his opinion piece, but I was disappointed that he didn’t say anything further about China. Nonetheless, I’m glad to see my meme taking root in the minds of economics professors. If enough of them come around, it will be easier for the politicians to finally do something about China.

The USA is an economic satellite of China, and likely to stay that way unless something is done soon.

Blatant Immigration Propaganda from CNN

While discussing the record-breaking level of immigration into the USA in my last post, I said that it was a deliberate campaign to beat down wages for American workers.

Maybe you thought that I was engaging in hyperbole?

Well, guess again.

Take a look at this specimen of corporate propaganda published by CNN (click picture to enlarge):

The statement:

“Ellis Island has put up a velvet rope line. To vital job generators, we are saying, “There’s no room for you.”

…is a direct contradiction of the official statistics published by the Department of Homeland Security. We are living in the highest-immigration period in American history.

Did this “journalist” and the fact-checkers and editors at this “news” organization even look at the stats? Clearly, not.

Now, I don’t mean to single out Wilkinson or even CNN. I just happened to come across this story shortly after I published the immigration charts. As a matter of fact, if you keep your eyes open, you will see this same “story” throughout the media – from left-wing CNN to right-wing CNBC. From Democrat Mort Zuckerman to Republicans Larry Kudlow and Donald Trump.

But what about the argument? Is it true that we need genius immigrants to come here and create jobs for all of us lazy, stupid, uneducated, unmotivated Americans? Clearly not. Over the last ten years, we have brought in 10.5 million legal immigrants, and during that time poverty has exploded across America. We have over 13 million people unemployed, and 45 million on food-stamps.

In other words, the “immigrants will save us” policy HAS ALREADY FAILED!

Rather spectacularly at that.

Immigration Armageddon

Does the USA have an unemployment problem? Or does it have an immigration problem? Did you know that during the Great Recession we brought in record numbers of immigrants? Take a look at this chart (click to enlarge):

USA Immigration by Decade

That’s right. Even when the unemployment rate went over 11% in 2009, immigration kept on going full steam ahead. The 10-year moving average stands at an all time high, as you can see on this chart:

Note: The first chart goes through 2009 since that’s when the decade ended. The second chart goes through 2010.

These numbers are not insubstantial in relation to unemployment. We have 13.1 million people unemployed now (FRED LNU03000000). If we had merely been running immigration at our historical average of 400,000 per year over the last two or three decades, unemployment wouldn’t even be an issue now.

Now, look back at the first chart. Look at the “1930” bar. It’s almost the smallest in history, right? During the Great Depression, the Roosevelt administration shut down immigration. It was just common sense; we didn’t have jobs for new people.

Why didn’t President Bush have that same common sense in 2008? And what’s President Obama’s excuse now?

Answer: during the 1930s, the USA was a nation of the people, by the people, and for the people. And today we are a nation of the corporations, by the corporations, and for the corporations.

Corporate profits benefit from mass immigration because the increased supply of labor drives down business “costs” – a.k.a. your paycheck.

Now, look at the decades when the mighty American Middle Class rose to power: the 1940s, 1950s, and 1960s were periods of low immigration. That isn’t a coincidence. Whether or not this nation has a middle class is a policy choice. Back then, we deliberately created a middle class beginning with the 1944 GI Bill.

Today, we have thrown the process in reverse. The vast wealth of the middle class is being converted into corporate profits via mass immigration, and wide-open free trade with low-wage nations that sucks entire industries out of the USA.

If the history books of the future are not written by corporate lobbyists (like our laws are today), the Great Recession will be recorded as the greatest betrayal of the American people in history.

Really, Commerce?

The U.S. Commerce Department says not to worry about offshoring. Everything’s cool. The only reason why the lightbulb factory where you used to work is now in Mexico is because there was demand in Mexico that had to be met. So the factory had to be moved. It had nothing to do with the fact that the new Mexican workers are only paid $2 per hour.

To which I ask: Really?

It’s impossible to ship lightbulbs to Mexico?

The entire American shoe industry was moved to China to supply the local market?

Factories were moved from Silicon Valley to Asia to make computers and gadgets for local consumption?

IBM shipped thousands of programming jobs to India to produce software for the Indian market?


Then why are there fleets of giant container ships bringing multinational products from Asia to the USA?

Why doesn’t Nike move some production from Asia to the USA to “supply the local demand”?

Because it’s all lies, of course. Orders were handed down to the Commerce Department economists to put lipstick on the offshoring pig. Without the massive profits from global labor arbitrage, how would corporate CEOs be able to justify their astronomical salaries?

But it’s not going to fool anybody. When people spend their unemployment checks, and food-stamp money at the dollar store, they see “Made in China” on just about everything. At least until all products are stamped: “Made in the World” which is an actual WTO effort underway right now.

That will fix everything.

Note: The Department of Commerce report was on the front page of the Wall Street Journal yesterday. Here’s the link.

Job-Creation Swamped by Immigration

Since March of 2010, the private sector has created jobs for 20 months in a row. The total comes to a modest 2,765,000. Our improving economy should make President Obama’s re-election a slam-dunk, right? Well, don’t be so sure because the president is also running a wide-open borders policy.

According to the most-recent statistics from the Department of Labor and the Department of Homeland security, jobs offshored are averaging 20,000 per month, and legal immigration 100,000 per month.

So, if we subtract jobs offshored, and legal immigration from jobs created, the 2,765,000 number from above gets whittled down to a grand total of 365,000. That’s a paltry 18,250 per-month average for this recovery. The red line on the chart below shows that we have only created a significant number of net jobs in four months of the recovery (click chart to enlarge):

Of course, the situation is much worse. The DOL stats don’t count all of the jobs offshored – only those reported by displaced workers seeking re-training funds. And illegal immigration and guest workers take a further toll on jobs.

The hard truth is that since the depths of the Great Recession, no progress has been made on net jobs for American citizens – you know, the people that vote in elections.

Note to Obama: It’s the sovereignty stupid!

Note: I used the Fed’s USPRIV data series for private-sector jobs. From 2005-2010, legal immigration has been over one million per year. The DOL reports offshoring stats with a long delay, but 2009 and 2010 were both well over 200,000 per year.